BRUSSELS—The European Union’s tariffs on Chinese-made electric vehicles (EVs) have achieved a measurable but limited impact, reducing their market share in the EU from 22% in 2024 to 17% in the first quarter of 2026, according to a new analysis by Transport & Environment (T&E). While the policy prompted Western automakers to relocate production to Europe, Chinese brands have expanded their presence, now accounting for more than half of all Chinese-made battery electric vehicle (BEV) imports into the bloc. The findings underscore the complexities of the EU’s trade strategy as it seeks to balance industrial competitiveness with climate goals.
Western Automakers Reduce Reliance on Chinese Production
The decline in the market share of Chinese-made EVs was driven largely by Western brands shifting production out of China. Tesla, BMW, and Volvo led the transition, with the share of Chinese-made BEVs produced by European manufacturers falling from 38% in 2024 to 23% in early 2026. Tesla’s share alone dropped from 26% to 19% over the same period. The shift reflects a broader effort by Western automakers to mitigate the impact of tariffs, which were introduced in 2024 following an anti-subsidy investigation by the European Commission.
However, the tariffs have not uniformly affected all manufacturers. SAIC, the Chinese automaker behind the MG brand, faced a 35% tariff and saw its BEV imports into the EU nearly halve between 2023 and 2025. In contrast, BYD, which was subject to a 17% tariff, more than doubled its BEV imports over the same period. Despite the tariffs, Chinese-branded BEVs remain 21% cheaper on average than those produced by European manufacturers, according to T&E’s analysis. The price disparity highlights the competitive challenge facing European automakers as they accelerate their transition to electric vehicles.
Chinese Brands Adapt with Onshoring and Hybrid Strategies
Rather than retreat from the EU market, Chinese automakers have adapted by accelerating plans to establish production facilities within Europe. Since the EU launched its anti-subsidy investigation in September 2023, Chinese manufacturers have announced 10 new production facilities across the continent. The onshoring strategy mirrors the earlier moves by Western brands but also reflects a broader shift in production focus toward plug-in hybrid vehicles (PHEVs), which are not subject to the same tariffs as BEVs.
The shift has been particularly pronounced in the PHEV market, where Chinese brands’ share surged from 3% in 2024 to 13% in 2026. The trend suggests that Chinese automakers are leveraging hybrid technology to maintain their foothold in the EU market while circumventing tariffs on fully electric vehicles. Lucien Mathieu, Cars Director at T&E, noted that the tariffs have had a mixed impact: “The EU tariffs worked up to a point. Western carmakers moved production to Europe, and Chinese manufacturers started to onshore. But the policy has not addressed the broader challenge of ensuring Europe’s competitiveness in EV and battery technology.”